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3 key things to know before starting to invest

Source: Finance Derivative

Nicolas Overloop ~ CEO of Horizon65

Institutional and HNWI  investors have known for ages how to structure investments to survive crises like the current inflation crisis with your net wealth intact, or at the very least rebounding after the crises past.

Building your own portfolio and keeping it balanced require a solid understanding of the fundamental factors that make up a good investment portfolio, the downside of doing so would be obviously harmful to your wealth.

That said, it is not easy as many different risks can materialize and you have to keep on top of your portfolio to make sure you know just what risks you are running and ensure you have appropriate countermeasures in place (hedges). It is possible to gain such knowledge through your own experience, however learning by doing is often an unprofitable way to go about it.

We will set out here the Big Four, the uncontested fundamentals of long-term investing. They are not great secrets, that will turn you into a star-investor, nor are they financial advice that promises ridiculous returns. It is basic knowledge that is the foundation of a solid investment strategy.



Very relevant in todays’ world of (hopefully temporary) 8% inflation rates.

Practically, inflation occurs when there is too much money chasing too few goods & services leading to higher prices for those goods & services. Today’s inflation cycle is driven however by the ballooning cost of energy, supply-chain disruptions due to china’s zero-covid policy and the large amount of consumer spending coming out of lockdowns.

In simple terms, it means rising prices and lower buying power for the money you do have on hand.
Central banks are tasked with managing the amount of money in the economy and are trying to keep inflation at 2% which is the rate you have to take into account when building your investment strategy.

In most cases, the best way to not only reduce your losses, but to turn inflation into a benefit for your fortune, is the use of “real assets” or “non-financial assets”. These are investments like stocks, real estate or commodities, that represent real ownership of a tangible object as backing. Since their prices also rise they either remain their value or profit over time.

If you do buy non-real assets (savings accounts, bonds or other fixed income) then make sure the interest rate on those exceeds the inflation-rate as otherwise you are losing money. e.g. a UK government bond has an interest rate of 2.3%, if you deduct 2% inflation losses from that you can expect a “real return” of 0.3% for buying a 10Y UK government bond today.

You will have to live for a very long time if you want to get rich buying those bonds.

Compound Interest

Interest is often called with different names like Yield or Return and is often displayed on an annual basis e.g. a 5% yield means that a 100 euro investment will be worth 105 euro in one year time.

Things get much more interesting (and profitable) when you take into account compound interest.

Understanding compounding is very important to any wealth strategy, even Albert Einstein said that “compound interest is the most powerful force in the universe. He who understands it, earns it; he who doesn’t, pays it.”

In essence, you can take advantage of compound interest when you continuously reinvest the gains you made in your portfolio. If you are pursuing a long-term investment strategy then compound interest will eventually become the vast majority of your wealth.

So what happens if you continuously reinvest?

Your portfolio will have two sources of capital mixed together (compounded):

1/ the reinvested profits past investments

2/ your original investment.

For some investments, you have to take no action as the gains of last year are already priced into (e.g. stocks, real-estate) but many investments also generate cash returns such as stocks, rent or interest.

These returns are far smaller than the initial investment and everything over 5 % per year is already exceptional.

If you take these gains and buy even more assets, you will gain even more revenue in the next year, and even more in the year after that. Your fortune will start to grow exponentially. If we take the 5 % as an example, it is possible to more than double the initial investment in only 15 years. Just by reinvesting the profit.

If you invest for your retirement which is often a 25-year time horizon, you should take compound interest into account for any investment strategy.


Many investors start out investing in very few assets such as buying only 2 stocks or investing everything in one property. However, the key to realize the compound interests is to build a portfolio that can cope with losses.

After all, if you invest long enough then every single risk will materialize (e.g. a pandemic, an oil shock, high inflation, …). No matter how strongly you believe the investment is sound, your net wealth doesn’t only rely on you believing it is sound but other people believing that too.

So what is diversification, it is a tradition to describe the underlying principle with an egg-basket. If you put all your eggs in one basket and you lose this basket, you lost all your eggs. However, if you divide the eggs into many baskets, you would only lose a few of them. If you are selling the eggs, you may even still make a profit if you lose one or two baskets.

Basically you should spread your investments to as many assets as possible (e.g. through ETFs) so that if one of the investments goes down in value, your portfolio will still go up in value.

In practice, this can be quite hard because the value of investments often move together with the flow of the market, which is why selecting assets that are unlikely to influence each other is an art of its own.

Building a diversified portfolio is the best way to make sure you realize a gain every year, even during pandemic years and recession years so that you can fully leverage compound interest effects.

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Driving business success in today’s data-driven world through data governance

Source: Finance derivative

Andrew Abraham, Global Managing Director, Data Quality, Experian

It’s a well-known fact that we are living through a period of digital transformation, where new technology is revolutionising how we live, learn, and work. However, what this has also led to is a significant increase in data. This data holds immense value, yet many businesses across all sectors struggle to manage it effectively. They often face challenges such as fragmented data silos or lack the expertise and resources to leverage their datasets to the fullest.

As a result, data governance has become an essential topic for executives and industry leaders. In a data-driven world, its importance cannot be overstated. Combine that with governments and regulatory bodies rightly stepping up oversight of the digital world to protect citizens’ private and personal data. This has resulted in businesses also having to comply e with several statutes more accurately and frequently.

We recently conducted some research to gauge businesses’ attitudes toward data governance in today’s economy. The findings are not surprising: 83% of those surveyed acknowledged that data governance should no longer be an afterthought and could give them a strategic advantage. This is especially true for gaining a competitive edge, improving service delivery, and ensuring robust compliance and security measures.

However, the research also showed that businesses face inherent obstacles, including difficulties in integration and scalability and poor data quality, when it comes to managing data effectively and responsibly throughout its lifecycle.

So, what are the three fundamental steps to ensure effective data governance?

Regularly reviewing Data Governance approaches and policies

Understanding your whole data estate, having clarity about who owns the data, and implementing rules to govern its use means being able to assess whether you can operate efficiently and identify where to drive operational improvements. To do that effectively, you need the right data governance framework. Implementing a robust data governance framework will allow businesses to ensure their data is fit for purpose, improves accuracy, and mitigates the detrimental impact of data silos.

The research also found that data governance approaches are typically reviewed annually (46%), with another 47% reviewing it more frequently. Whilst the specific timeframe differs for each business, they should review policies more frequently than annually. Interestingly, 6% of companies surveyed in our research have it under continual review.

Assembling the right team

A strong team is crucial for effective cross-departmental data governance.  

The research identified that almost three-quarters of organisations, particularly in the healthcare industry, are managing data governance in-house. Nearly half of the businesses surveyed had already established dedicated data governance teams to oversee daily operations and mitigate potential security risks.

This strategic investment highlights the proactive approach to enhancing data practices to achieve a competitive edge and improve their financial performance. The emphasis on organisational focus highlights the pivotal role of dedicated teams in upholding data integrity and compliance standards.

Choose data governance investments wisely

With AI changing how businesses are run and being seen as a critical differentiator, nearly three-quarters of our research said data governance is the cornerstone to better AI. Why? Effective data governance is essential for optimising AI capabilities, improving data quality, automated access control, metadata management, data security, and integration.

In addition, almost every business surveyed said it will invest in its data governance approaches in the next two years. This includes investing in high-quality technologies and tools and improving data literacy and skills internally.  

Regarding automation, the research showed that under half currently use automated tools or technologies for data governance; 48% are exploring options, and 15% said they have no plans.

This shows us a clear appetite for data governance investment, particularly in automated tools and new technologies. These investments also reflect a proactive stance in adapting to technological changes and ensuring robust data management practices that support innovation and sustainable growth.

Looking ahead

Ultimately, the research showed that 86% of businesses recognised the growing importance of data governance over the next five years. This indicates that effective data governance will only increase its importance in navigating digital transformation and regulatory demands.

This means businesses must address challenges like integrating governance into operations, improving data quality, ensuring scalability, and keeping pace with evolving technology to mitigate risks such as compliance failures, security breaches, and data integrity issues.

Embracing automation will also streamline data governance processes, allowing organisations to enhance compliance, strengthen security measures, and boost operational efficiency. By investing strategically in these areas, businesses can gain a competitive advantage, thrive in a data-driven landscape, and effectively manage emerging risks.

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The Benefits of EV Salary Sacrifice: A Guide for Employers and Employees

As the UK government continues to push for greener initiatives, electric cars have become increasingly popular. The main attraction for both employers and employees is the EV salary sacrifice scheme.

By participating in an EV salary sacrifice scheme, both employers and employees can enjoy cost savings and contribute to environmental sustainability along the way! This article will delve into the specifics of how these schemes operate, the financial advantages they offer, and the broader positive impacts on sustainability.

We will provide a comprehensive overview of the mechanics behind EV salary sacrifice schemes and discuss the various ways in which they benefit both employees and employers, ultimately supporting the transition to a greener future in the UK.

What is an EV Salary Sacrifice Scheme?

An EV salary sacrifice scheme is a flexible financial arrangement that permits employees to lease an EV through their employer. The key feature of this scheme is that the leasing cost is deducted directly from the employee’s gross salary before tax and National Insurance contributions are applied. By reducing the taxable income, employees can benefit from substantial savings on both tax and National Insurance payments. This arrangement not only makes EVs more affordable for employees but also aligns with governmental incentives to reduce carbon emissions.

For employers, implementing an EV salary sacrifice scheme can lead to cost efficiencies as well. The reduction in National Insurance contributions on the employee’s reduced gross salary can offset some of the costs associated with administering the scheme. Additionally, such programmes can enhance the overall benefits package offered by the employer, making the company more attractive to prospective and current employees.

Benefits for Employees

1. Tax and National Insurance Savings

By opting for an EV salary sacrifice scheme, employees can benefit from reduced tax and National Insurance contributions. Since the lease payments are made from the gross salary, the taxable income decreases, resulting in substantial savings.

2. Access to Premium EVs

Leading salary sacrifice car schemes often provide access to high-end electric vehicles that might be otherwise unaffordable. Employees can enjoy the latest EV models with advanced features, contributing to a more enjoyable and environmentally friendly driving experience.

3. Lower Running Costs

Electric vehicles typically have lower running costs compared to traditional petrol or diesel cars. With savings on fuel, reduced maintenance costs, and exemptions from certain charges (such as London’s Congestion Charge), employees can enjoy significant long-term financial benefits.

4. Environmental Impact

Driving an electric vehicle reduces the carbon footprint and supports the UK’s goal of achieving net-zero emissions by 2050. Employees can take pride in contributing to a cleaner environment.

Benefits for Employers

1. Attract and Retain Talent

Offering an EV salary sacrifice scheme can enhance an employer’s benefits package, making it more attractive to potential recruits. It also helps in retaining current employees by providing them with valuable and cost-effective benefits.

2. Cost Neutrality

For employers, EV salary sacrifice schemes are often cost-neutral. The savings on National Insurance contributions can offset the administrative costs of running the scheme, making it an economically viable option.

3. Corporate Social Responsibility (CSR)

Implementing an EV salary sacrifice scheme demonstrates a commitment to sustainability and corporate social responsibility. This can improve the company’s public image and align with broader environmental goals.

4. Employee Well-being

Providing employees with a cost-effective means to drive electric vehicles can contribute to their overall well-being. With lower running costs and the convenience of driving a new EV, employees may experience reduced financial stress and increased job satisfaction.

How to Implement an EV Salary Sacrifice Scheme

1. Assess Feasibility

Evaluate whether an EV salary sacrifice scheme is feasible for your organisation. Consider the number of interested employees, potential cost savings, and administrative requirements.

2. Choose a Provider

Select a reputable provider that offers a range of electric vehicles and comprehensive support services. Ensure they can handle the administrative tasks and provide a seamless experience for both the employer and employees.

3. Communicate the Benefits

Educate your employees about the advantages of the scheme. Highlight the financial savings, environmental impact, and access to premium EV models. Provide clear guidance on how they can participate in the programme.

4. Monitor and Review

Regularly review the scheme’s performance to ensure it continues to meet the needs of your employees and the organisation. Gather feedback and make adjustments as necessary to enhance the programme’s effectiveness.


The EV salary sacrifice scheme offers a win-win situation for both employers and employees in the UK. With significant financial savings, access to premium vehicles, and a positive environmental impact, it’s an attractive option for forward-thinking organisations. By implementing such a scheme, employers can demonstrate their commitment to sustainability and employee well-being, while employees can enjoy the benefits of driving an electric vehicle at a reduced cost.

Adopting an EV salary sacrifice scheme is a step towards a greener, more sustainable future for everyone.

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Machine Learning Interpretability for Enhanced Cyber-Threat Attribution

Source: Finance Derivative

By: Dr. Farshad Badie,  Dean of the Faculty of Computer Science and Informatics, Berlin School of Business and Innovation

This editorial explores the crucial role of machine learning (ML) in cyber-threat attribution (CTA) and emphasises the importance of interpretable models for effective attribution.

The Challenge of Cyber-Threat Attribution

Identifying the source of cyberattacks is a complex task due to the tactics employed by threat actors, including:

  • Routing attacks through proxies: Attackers hide their identities by using intermediary servers.
  • Planting false flags: Misleading information is used to divert investigators towards the wrong culprit.
  • Adapting tactics: Threat actors constantly modify their methods to evade detection.

These challenges necessitate accurate and actionable attribution for:

  • Enhanced cybersecurity defences: Understanding attacker strategies enables proactive defence mechanisms.
  • Effective incident response: Swift attribution facilitates containment, damage minimisation, and speedy recovery.
  • Establishing accountability: Identifying attackers deters malicious activities and upholds international norms.

Machine Learning to the Rescue

Traditional machine learning models have laid the foundation, but the evolving cyber threat landscape demands more sophisticated approaches. Deep learning and artificial neural networks hold promise for uncovering hidden patterns and anomalies. However, a key consideration is interpretability.

The Power of Interpretability

Effective attribution requires models that not only deliver precise results but also make them understandable to cybersecurity experts. Interpretability ensures:

  • Transparency: Attribution decisions are not shrouded in complexity but are clear and actionable.
  • Actionable intelligence: Experts can not only detect threats but also understand the “why” behind them.
  • Improved defences: Insights gained from interpretable models inform future defence strategies.

Finding the Right Balance

The ideal model balances accuracy and interpretability. A highly accurate but opaque model hinders understanding, while a readily interpretable but less accurate model provides limited value. Selecting the appropriate model depends on the specific needs of each attribution case.

Interpretability Techniques

Several techniques enhance the interpretability of ML models for cyber-threat attribution:

  • Feature Importance Analysis: Identifies the input data aspects most influential in the model’s decisions, allowing experts to prioritise investigations.
  • Local Interpretability: Explains the model’s predictions for individual instances, revealing why a specific attribution was made.
  • Rule-based Models: Provide clear guidelines for determining the source of cyber threats, promoting transparency and easy understanding.

Challenges and the Path Forward

The lack of transparency in complex ML models hinders their practical application. Explainable AI, a field dedicated to making models more transparent, holds the key to fostering trust and collaboration between human and machine learning. Researchers are continuously refining interpretability techniques, with the ultimate goal being a balance between model power and decision-making transparency.

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